Selling your house to family: what price is safe and what should you watch out for?

Selling your house to family: what price is safe and what should you watch out for?

If you are thinking about selling your house to family, you usually want two things at once: a fair price for yourself and a good deal for a child, brother or niece. That is perfectly possible, but a family sale is scrutinised more closely than an ordinary sale. The tax authorities look at the market value, and other heirs may later question a price that was too low. Below you can read how to back up the price and which agreements to put in writing.

Can you simply sell your home to a family member?

Yes. In Belgium you can sell your home to anyone you like, including your children, parents, brothers or sisters. There is no ban and you do not need anyone's permission. Legally it is an ordinary sale: you sign a sale agreement (compromis), the notary checks the planning and soil information, and then the notarial deed follows.

The obligations stay the same too. The EPC, the soil certificate, the asbestos certificate (in Flanders) and the inspection of the electrical installation are required, even if the buyer is your son. A family member cannot waive those certificates, just as an outside buyer cannot.

The difference lies in the price. When you sell to a stranger, you negotiate until you reach a market price. With family, the temptation to ask a "mates' rate" is strong. That is exactly where most problems start, both with the tax authorities and within the family. If you back up the price properly, you avoid most of them.

The tax authorities look at the market value, not at your price

The buyer pays registration duties (in Flanders: transfer duties on sales). They are calculated on the agreed price, but never on less than the market value (venale waarde): the price the home would fetch in a normal sale. If your price is clearly below that value, the tax administration can carry out a control valuation.

If that shows the real value is higher, the buyer pays additional duties on the difference. If the undervaluation is large (the rule speaks of at least one eighth of the declared price), a fine is usually added on top. In Flanders the check is done by the Flemish Tax Administration (Vlaamse Belastingdienst), in Brussels and Wallonia by the competent regional or federal administration. You will find the exact procedure and rates on your region's website or from your notary.

We explain the difference between the two concepts in more detail in our article on the difference between sale price and market value. For a family sale, one lesson is enough: a price you cannot justify often costs the buyer more afterwards than the discount saved.

A price that is too low can be a disguised gift

Besides the tax side, there is the civil-law side. If you sell well below market value, the difference is in fact a gift. This is called a mixed or disguised gift. It has two consequences.

First, the administration can claim gift tax on that difference instead of, or in addition to, the registration duties. Second, the benefit counts towards your estate later on. Together your children are entitled to a legal minimum, the reserved share, which since the 2018 reform of inheritance law amounts to half of the estate. If one child received more than the others through a cheap purchase, their brothers or sisters can ask after your death for that benefit to be settled.

A sale to a future heir in which you keep a life annuity or the usufruct for yourself needs extra care. In certain cases the law presumes that such an arrangement is a gift, unless the other heirs agree to it. Have your notary check this beforehand. If you deliberately want to give away part of the value, it is better to do so openly through a registered gift. You can read how that works in our article on gifting property to a child.

How to back up a price that holds up

A family sale stands or falls with a price you can justify to the tax authorities and to the rest of the family. So work in three steps.

1. Start with a first estimate. A free online valuation gives you a range based on recent sales in your area. That way you know straight away whether the price you have in mind is close to the market.
2. Have an estate agent value the home on site. Only someone who sees the property takes its condition, its position in the street and any renovation needs into account. Ask for a written report with comparable sales. Through ImmoMakelaarVergelijker.be you can compare up to 3 local estate agents, free and without obligation.
3. Keep everything in the file. The valuation report, photos of the condition of the home and any quotes for necessary works. In case of a check or a dispute between heirs, that is your best evidence.

A small discount because there is no agency commission or sales costs can be defended. A price tens of thousands of euros below the valuation usually cannot.

Smart alternatives to a mates' rate

If you still want to help your child, there are ways that hold up better than an artificially low price.

• Sell at market value and gift part of the price. You sell correctly and then give an amount, for example through a registered gift or at the notary. Everything is transparent and can be settled with the other children.
• Deferred payment or a family loan. Your child pays part of the price later. Put it in writing, with a repayment plan and possibly interest. Without paperwork, a loan may later be treated as a gift.
• Agree on equal treatment. Discuss the sale with all your children and, if you like, have their agreement included in the deed. That prevents disputes after your death.

Which option suits you best depends on your region, your age and the rest of your assets. A conversation with the notary beforehand costs little and prevents a lot.

Frequently asked questions

Can I sell my house to my child for less?

You can, but registration duties are calculated on at least the market value. If the price is clearly lower, the tax authorities can claim additional duties and sometimes a fine, and the difference may be treated as a gift.

Do I need an estate agent to sell to family?

Not to find a buyer, because you already have one. An agent is useful for a well-founded valuation, though. A written valuation report is your best proof that the price is in line with the market.

Do I also need an EPC and soil certificate for a family sale?

Yes. All the legal certificates required for a sale also apply when the buyer is a family member. The notary requests them for the deed.

Can my other children challenge the sale later?

After your death they can ask for a benefit from a sale that was too cheap to be set against their reserved share. A correct price or their written consent greatly reduces that risk.

To conclude

Selling your house to family is simple as long as the price is right. Make sure you have a valuation you can show, choose an open gift if you want to give a child extra help, and have the notary review the arrangement beforehand. Unsure about the value of your home? Start with a free valuation or compare local estate agents for an on-site valuation.